Automated Sales Order Processing10 Nov, 2009 By: Jean-Michel Bérard imageSource
Automated Sales Order Processing
As automation has continuously revolutionized the manufacturing of all kinds
of products, dealers & resellers have lagged behind in management of customer
orders for those products. Today, many still rely on the most antiquated manual
processes for getting orders into their back-office systems.
Maintaining a high level of control over customer order document processing is
always essential for business performance, but even more so during tough
economic times in which the need to cut costs clashes head-on with high customer
expectations. Dealers need to have a crystal-clear view of what is being ordered
by whom and where each order is, and they need to be able to access customer
order documents easily.
And of course, the more efficiently orders can be entered, the faster they can
be fulfilled and the sooner the seller can receive payment.
Paper is so 20th Century
Despite the availability of mature and proven technology to automate sales
order processing, many companies still have customer service staff spending
hours every day on activities like picking up, collating, distributing, entering
and retrieving paper orders. Accuracy suffers from incorrect entry of orders,
and dealers pay the price in returns, restocking, credit notes, write-offs,
additional shipping costs and customer dissatisfaction.
Managing a paper-based sales order process is labor-intensive and
time-consuming with little or no visibility into day-to-day activities. Orders,
or parts of orders, can easily get “lost in the system.” Making a simple change
to an order is often a source of frustration for both the buyer and the seller.
When a customer sends in an order by fax or mail and then calls to make sure it
was received, trying to track down the order (on the fax machine, at the
printer, with a customer service rep or order entry clerk, entered into the ERP
system, or any number of other possibilities) can throw an expensive wrench into
the system. Certain orders may have priority over others but still go through
the same first-in/first-out process. As a result, it is not uncommon for dealers
to have order entry backlogs of several days. And a company must maintain order
processing staffing at sufficient levels to handle all of the orders it
When dealers look at the fact that their sales order process is manual and
paper-driven, they see it not only costs money but takes time away from
answering phones and entering new orders. Many companies have good
customer-satisfaction initiatives centered on the overriding principle of making
it easy to do business with them. Sooner or later they act on the knowledge that
to support these initiatives they must quit paper. Only then can they free the
necessary time for customer service to take more phone calls and enter more
Proficiency at what cost?
By necessity, most dealers have become highly proficient at processing paper
orders. But the cost is high — not only in operating expense (a paper order can
cost as much as $60 to process and up to $200 to reprocess when there are data
entry errors or documents get lost), but also in customer satisfaction. In
short, using paper will only cost more and more money — while bringing no value
to customer service.
Economic forces and new sources of competition are compelling dealers to
address the dilemma of how to cut costs and improve customer service. With order
volumes down and market share more precious than ever before, nearly everyone is
looking to cut operating costs quickly and deeply. Forward-looking companies
also know they need to be ready for the upturn with operational efficiencies
that give them a competitive advantage. Along with the high cost of processing
paper sales orders, dealers recognize the impact of paper on customer service.
Today every order really counts, and dealers simply cannot afford to lose
Today’s leading-edge automation technology enables companies to capture up to
100 percent of orders electronically — even including those received by fax and
email. Along with bringing control to handling of exceptions such as blocked
orders or invalid part numbers, preventing mismatches of customer and payment
terms, and eliminating lost or misplaced orders, this reduces operational costs
associated with paper orders by up to 70 percent, in large part as a result of
minimizing the labor required for order processing. According to a recent study
conducted by Forrester Consulting on behalf of document process automation
provider Esker, Inc., the Esker customer studied will save five million dollars
in labor costs over three years, above and beyond savings from reduced paper
consumption and document storage, by automating its sales order process. The
same company immediately eliminated 12 fax machines dedicated to inbound orders.
Smaller companies achieve similar results through automation. Recalling the
factors that drove his company’s sales order process improvement project, an
Esker customer’s technical advisor said, “Our focus was to effectively remove
the in-baskets. The cost and labor associated with paper was an obvious
negative. But also, access to the data was all manual. So if customer service
got a call with a question, they would have to call back with an answer after
they found the documentation. A request to see the original order for
confirmation would require pulling the file and copying, faxing or printing the
pages — and sometimes all three.”
The most comprehensive automation solutions deliver the additional value of
consolidating sales order processing on a single platform. Such a platform can
eliminate the expense of maintaining the complicated mix of point-to-point
systems for faxing, imaging, OCR, data capture, formatting, validation,
workflow, exception handling, EDI, data conversion and archiving that is a
common characteristic of dealers’ IT environments. And the same platform can be
used for automated customer invoicing to optimize document processes throughout
the order-to-cash cycle.
Automated sales order processing boosts productivity exponentially,
multiplying the number of orders that can be processed per person per hour —
which helps dealers avoid costs of recruiting, hiring, and replacing one of
their most valuable assets: CSRs. For example, a leading global dealer of IT
products saw benefits nearly immediately as a streamlining document processes.
The number of sales orders it could process each day jumped by 20%, resulting in
a similarly-sized boost in revenue. In addition, data input errors decreased
significantly – and fewer errors ultimately mean more satisfied customers.
Quitting paper leads to a better customer experience by enabling increased
speed, responsiveness and customer care. Order entry accuracy can rise to
virtually 100 percent with automation, resulting in less reprocessing and fewer
returns that hit the bottom line hard.
Reporting capabilities of automated sales order processing solutions can also
enable monitoring of vital metrics such as time and volume. Managers can see the
number of orders that have been entered each day, how many have been received
but not processed, how long ago each order was sent in, the amount of time it
takes each CSR to enter an order, which customers are using correct product or
pricing information and which are not.
Another way automated sales order processing saves dealers money is by reducing
the cost of meeting service level agreements and assuring that orders get out on
time. One of the most common outcomes of sales order process automation is to go
from an order entry backlog to same day order entry. And as orders come in from
customers in different markets and across geographic regions, they can be
assigned a priority based on customer status, location, product, distribution
point, and other parameters built into business rules that the automation tool
uses to govern processing of sales orders.
In the areas of archiving and regulatory compliance, automated sales order
processing solutions provide electronic archiving capabilities that lower the
costs of off-site storage and data retrieval for auditing to satisfy
requirements such as those of the Sarbanes-Oxley Act.
On premise or on demand
In an economic landscape where budgets are subject to the sharpest scrutiny,
dealers and resellers have options to gain the operational efficiencies and
customer service advantages of automated sales order processing within their
objectives to lower capital expenses. Esker, for example, makes all the benefits
of automated sales order processing available either as an on-premise server
platform or as an on-demand service leveraging the capabilities of that platform
without the up-front costs of implementing software.
The SaaS model offers immediate ROI with quick, enterprise-wide deployment of an
easy-to-use tool to streamline the process of entering, approving, archiving and
accessing sales orders — without adding IT complexity or maintenance costs.
Companies also benefit from the platform’s capabilities to automate business
processes throughout the procure-to-pay cycle in addition to order-to-cash,
including purchasing and vendor invoice processing.
No matter which approach a company takes to automate its sales order process,
automation holds the key to solving the dual dilemma of cost reduction and
customer service improvement.
Jean-Michel Bérard is Worldwide CEO, President of the Board of Directors, Esker,
Inc. For further information visit www.esker.com.